Richard Whiting joined the company as president of Kinder Morgan Resources after more than three decades in the coal business, including serving as president and CEO of Patriot Coal Corp. and chief marketing officer of Peabody Energy Corp.

He and John Schlosser, president of Kinder Morgan Terminals, spoke with FuelFix about the new business and how they expect it to grow. Here are edited excerpts:

FuelFix: What drew you to this job?

Whiting: It was several things. The reputation and size and success factor of Kinder Morgan was certainly part of it. Circumstances in the coal and mineral industry now seemed like it was ripe for another player to come in.

Also, it seemed like an ideal match with the contacts and exposures I’ve had over the last 30 or so years. It seemed like a natural to put some of those contacts to work.

FuelFix:Your background is in the coal industry, but Kinder Morgan Resources doesn’t plan to focus exclusively on coal. How do you see the strategy unfolding?

Whiting: I think I’ll go to some of the more familiar places first, some of my coal peers. But I’ve had a lot of contact with senior players at the non-coal mining groups for North America. I think as this starts to get some traction, I’ll put some of those relationships to work.

John Schlosser, president of Kinder Morgan Terminals

Schlosser: The platform will be the same under any of the products. We handle over 1,000 products today. Rick has incredible contacts on the coal side, but we hope to tap into our other products, as he comes up to speed.

FuelFix: Do you see this as moving Kinder Morgan beyond a midstream company?

Schlosser: We handle over 100 million tons of bulk commodities today through the terminals we have throughout North America. We see this as just another service we could offer to our existing customers, assisting them.

FuelFix: So how big a step out is this?

Schlosser: We don’t see it as a step out. We’re a toll road, and this is just another form of a toll road. We own the underlying resources, and we’ll collect the toll from the operator.

FuelFix: When do you expect to start making acquisitions?

Schlosser: We don’t comment on transactions before they’re complete, but the goal is to get this up and running very quickly.

FuelFix: Do you have specific basins in mind?

Whiting: I think our mind is open to any location in North America. We’ll just be strategic in looking at where the strongest markets are going to be and where the strongest participants are going to be.

FuelFix: Kinder Morgan said in its announcement that the companies leasing the properties would take on any commodity price risk, but will you be able to escape that entirely?

Schlosser: There will be a fixed component and a royalty component, so we’ll insulate ourselves with the fixed component, and then the royalty component will be the upside.

FuelFix: People keep predicting the death of coal, but it’s still doing pretty well, depending on what’s happening with the price of natural gas. What do you see long-term, both in the U.S. and internationally?

Whiting: With all the global growth in demand for electricity, I think it’s inevitable it keeps marching forward, particularly in Asia.

I think as the price of natural gas increases, coal is a lot more likely to be 40 plus percent (of electric generating capacity) than anything less than that. It’s hard to take 40 percent out of the mix.

There’s room for it all. There’s a great place for natural gas. Coal is just one of the elements.

It’s not for the faint of heart. It’s clearly volatile, but the volumes continue to grow.

FuelFix: So what makes this the right time for a venture like this?

Whiting: There’s some distress in the markets now. There’s going to be some turnover, some new players. They could use some collaboration, some smaller landlords that could use us.

Sometimes it’s the challenge of the markets that creates the opportunity.